Government Operations Committee on Nov. 30th, 2023

[Anita Anand]

Thank you for the question and the opportunity to respond.

I will say that the manager's guide on the procurement of professional services is meant for managers who need additional resources to refer to when they are considering procuring resources such as professional services through a contract. I want to continue to put in place good governance practices for the public service, because this is an area where we are looking to continue to improve.

I also want to make sure we have the opportunity to review these guidelines, which may be necessary once we have lessons learned. In the guidelines, I specifically put in place a paragraph that says we “will update these guidelines within the first two years of implementation, and then subsequently as required, to reflect lessons learned from their implementation and emerging leading practices.”

What this all means is that I take this very seriously. My department takes it very seriously. That's why it was one of the first things I did when coming into office as minister.

The second thing I did was launch the spending review. I recently tabled the supplementary estimates (B), the subject of today's discussion. I tabled $350 million in savings in professional services from departments across our government. I went to all departments and ministers and asked them to please find savings in the area of professional services.

Those are two tangible things I have done in the area of professional services. That is our governance in this area since I came into the office of President of the Treasury Board. I will continue to work diligently with my team and implement best practices across government.

Thank you.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Minister.

In your opening remarks, you talked about $14.3 billion in professional services in the previous year. About $800 million of that included paying for “professional and special services”. I'm very curious to know how much of the $14.3 billion in professional services was actually used on management consulting, and what that translates to exactly. What were these management consulting services for?

[Anita Anand]

The answer is approximately 67%, but I'd like to break this all down for you.

The figure you are referring to is for a range of expenditures—both internal and external—that cover 14 different categories, such as construction, engineering and architecture. Less than 6% of this figure was for management consulting. I'd like to clarify my answer: Less than 6% of that figure was for management consulting. The examples I'd like to cite are these: consultants to advance benefits delivery modernization, the subject of the very first question I received about how we are going to deliver digitization for our government and the people of Canada; expertise related to health for the administration of the Canada dental benefit plan; and moneys for Indigenous Services Canada for health services in indigenous communities.

You can see that there are areas where there is a legislative requirement, or where it is necessary to contract with external consultants. We are trying to keep this to a minimum. That's why the amount is 6% of this figure for management consulting.

As I said, “Manager’s Guide: Key Considerations When Procuring Professional Services” sets down guidelines to ensure all public servants are taking this matter very seriously and making sure professional services are contracted for only when absolutely necessary.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Minister.

You talked about the manager's guide. Did you set targets for managers for the upcoming year in order to drive further efficiencies and, as such, reduce our reliance on external consulting and build internal capacity? Is there a target set by the department?

[The Chair, Conservative, Kelly McCauley]

I am afraid we're out of time.

Minister, you're welcome to hang around for another 30 seconds and answer, or you can—

[Anita Anand]

I'll follow up with you separately.

I'd like to thank you, Mr. Chair. I appreciated the conversation, and I look forward to coming back for another one.

[The Chair, Conservative, Kelly McCauley]

Wonderful. We will excuse you.

I understand there is someone else joining the table, from the officials.

We'll suspend for about 45 seconds.

[The Chair, Conservative, Kelly McCauley]

We are back, colleagues.

Mrs. Block, go ahead for five minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

In his report on the supplementary estimates (B), the Parliamentary Budget Officer stated:

Spending on professional and special services continues to increase, despite recent higher lapse rates.... Inclusive of Supplementary Estimates (B), 2023-24, total proposed authorities for professional and special services are at a record $21.6 billion. This amount will likely increase with additional spending requests in the next Supplementary Estimates.

I know we had this conversation with the minister just prior to this part of the meeting, but I'm wondering if you can advise me what directives you have received from the minister on decreasing outsourcing.

[Annie Boudreau]

Thank you for the question.

On the $21.6 billion, I will start by saying that 20% of that amount is for internal services within the Government of Canada. This means that we have Justice invoicing department clients. We also have Shared Services Canada invoicing clients, as well as PSPC.

As the minister said earlier, we have 14 categories included under that category, and we have amounts.... For example, we have nurses in the north for Indigenous Services Canada providing professional services to indigenous peoples.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

I would really like you to just answer the question I asked. What directives have you received from the minister on decreasing outsourcing?

[Annie Boudreau]

I will go back to refocusing government spending. As you heard from the minister, in the supplementary estimates (B), we have a reduction of about $350 million. That amount will increase to $1.5 billion next year when the minister tables the main estimates, and that amount will be ongoing, so every year you're going to see a decrease of about $1.5 billion in professional services.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

Can you tell us if the decreases will be permanent or simply lapsed funding?

[Annie Boudreau]

That's correct. The word “ongoing” means that the decrease will be permanent.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I'm also wondering if you can tell me whether or not any of the revelations coming from the study being undertaken by this committee into ArriveCAN have sparked changes in the contracting processes of the department.

[Samantha Tattersall, Assistant Comptroller General, Acquired Services and Assets Sector, Treasury Board Secretariat]

Thank you for the question.

The first thing I would say is that in the discussion on these studies, what's become clear is that the supply mechanism by which professional services are engaged is something to look at. That's something PSPC is undertaking. The officials spoke about it at this committee. We are following along with PSPC on how we review these supply arrangements.

The second thing is that we sent out a tool to all departments' internal audit functions that lays out key risks in procurement. These are internal controls that address those risks to help internal auditors in their review of these internal controls.

The third thing we've been doing is working with PSPC on enhancing our training. The first is for procurement officers, but the second is for the business owners. When we talk about procurement, there are always two parts to it, so we're looking at.... While the minister talked about how we have embedded the guide into delegated training for managers, we're looking at expanding that and talking with the Canada School of Public Service about how we can ingrain some of this training into its executive leadership courses.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

Toward the end of my intervention with the minister, I noted that the Treasury Board is responsible for accountability and ethics. I also know that, ultimately, the Treasury Board is responsible for the rules that are put in place for all departments when it comes to the contracting of services, and that Public Services and Procurement provides the support in doing that.

I'm wondering if you've also had any conversations around the rules for contracting, even with regard to subcontracting or standing offers that would be in place when it comes to contracting.

[The Chair, Conservative, Kelly McCauley]

I'm afraid we are past our five minutes for this round.

Perhaps you can respond in writing to the committee regarding that specific question.

Mr. Bains, you have five minutes. Go ahead.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to our team from the TBS for joining us today.

My first question is, could you please explain to the committee what the “refocusing government spending” initiative is? That's for whoever wants to take that question.

[Annie Boudreau]

Thank you for that question.

Refocusing government spending was first announced in budget 2022 and was reannounced with bigger amounts in budget 2023. The wording from the budget is to reduce discretionary spending in terms of professional services by roughly 15% and to do the same in respect of operating expenditures and transfer payments, but by roughly 3%.

If you look at the budget, you will see that there is a financial profile that will show the amount over the years. This year, as stated by the minister, the amount was $500 million. It has been included in the supplementary estimates (B). You can also see an online annex. You will see the details by organization. We have 68 organizations.

Next year—

[Parm Bains, Liberal, Steveston—Richmond East, BC]

There seems to be some misunderstanding by opposition members. Can you clarify how the proposals are brought forward and what the timelines are like?

[Annie Boudreau]

We are, as we speak, looking at all the proposals that we have received from the 80 scoped-in departments. We're doing the analysis as we speak. Again, we have until March, because when the president tables the main estimates, she will show in those estimates a reduction as per the financial profile in the budget, which is $2,331,000,000.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Okay.

We've also seen some concerns about the government spending review and the impact it will have on the armed forces. We see in the estimates approximately $584 million for compensation and benefits for the Canadian Armed Forces. I believe I've heard it stated before that the refocused spending will not impact the CAF. Would you be able to speak to the impact of the funding within the supplementary estimates (B)?

Thank you.

[Annie Boudreau]

Thank you for the question.

I would start with the refocusing of government spending. The budget wording was clear that the Canadian Armed Forces would be excluded from the review. It has been excluded from the review, and also relocation and operating costs for them.

In terms of the amount they have, it's for benefits, and I will turn this over to Marie-Chantal for the benefits that are included here for the Canadian Armed Forces. Thank you.

[Marie-Chantal Girard]

The overall compensation that is forecast for benefits includes all the protections that we provide to our employees, including the armed forces.

If you see an upward trend on the costs, we're observing three main reasons for that. We've all observed that medical and health services costs have been increasing over the years. We also have inflation costs, as well as the population or usage—what we call “price and volume”—which is the number of claims and the number of employees who benefit from those health, dental and disability benefits.